Dividend yield of 14.1% based on the November 2, 2018 closing stock
price of $10.48.

Debt-to-equity ratio of 8.8:1 as of September 30, 2018; adjusted for
unsettled purchases and sales, the debt-to-equity ratio was 8.7:1.

Net mortgage assets-to-equity ratio of 7.9:13 as of
September 30, 2018.

Third Quarter 2018 Results

"Our third quarter results again demonstrated the effectiveness of our
hedging and portfolio management to protect book value and bolster net
income in a rising interest rate environment," stated Laurence Penn,
Chief Executive Officer and President. "As interest rates rose and
Agency RMBS prices declined in yet another quarter, the gains from our
hedges along with positive carry from our investments more than offset
the markdowns in our portfolio. Our hedging strategy continues to be a
meaningful differentiator for EARN.

"We continue to believe that Agency RMBS offers attractive value today,
with favorable prepayment fundamentals and yield spreads that remain
near their widest levels in the past two years. We took advantage of the
yield spread widening during the quarter to cover a portion of our TBA
short positions and increase our net mortgage assets-to-equity ratio.

"During the first weeks of the fourth quarter, we have seen more
opportunities to add assets at both higher yields and wider spreads, and
expand our net interest margin and grow core earnings. At the same time,
the return of volatility to the markets is underscoring the importance
of our hedges to preserve book value."

The Company defines its net mortgage assets-to-equity ratio as the
net aggregate market value of its mortgage-backed securities
(including the underlying market values of its long and short TBA
positions) divided by total shareholders' equity. As of September
30, 2018 the market value of the Company's mortgage-backed
securities and its net short TBA position was $1.576 billion and
$(223.8) million, respectively, and total shareholders' equity was
$170.2 million.

Financial Results

The following table summarizes the Company's portfolio of RMBS as of
September 30, 2018 and June 30, 2018:

September 30, 2018

June 30, 2018

(In thousands)

CurrentPrincipal

Fair Value

AveragePrice(1)

Cost

AverageCost(1)

CurrentPrincipal

Fair Value

AveragePrice(1)

Cost

AverageCost(1)

Agency RMBS(2)

15-year fixed-rate mortgages

$

145,249

$

145,769

$

100.36

$

151,319

$

104.18

$

147,080

$

148,499

$

100.96

$

153,512

$

104.37

20-year fixed-rate mortgages

7,687

7,866

102.33

8,287

107.81

8,143

8,421

103.41

8,767

107.66

30-year fixed-rate mortgages

1,273,788

1,297,612

101.87

1,335,573

104.85

1,263,388

1,294,483

102.46

1,329,912

105.27

ARMs

18,513

19,051

102.91

19,735

106.60

20,124

20,730

103.01

21,521

106.94

Reverse mortgages

70,938

75,049

105.80

77,510

109.26

71,781

76,831

107.04

78,603

109.50

Total Agency RMBS

1,516,175

1,545,347

101.92

1,592,424

105.03

1,510,516

1,548,964

102.55

1,592,315

105.42

Non-Agency RMBS

14,418

11,952

82.90

9,908

68.72

14,839

12,024

81.03

10,278

69.26

Total RMBS(2)

1,530,593

1,557,299

101.74

1,602,332

104.69

1,525,355

1,560,988

102.34

1,602,593

105.06

Agency IOs

n/a

18,684

n/a

17,601

n/a

n/a

19,115

n/a

18,583

n/a

Total mortgage-backed securities

$

1,575,983

$

1,619,933

$

1,580,103

$

1,621,176

(1)

Represents the dollar amount (not shown in thousands) per $100 of
current principal of the price or cost for the security.

(2)

Excludes Agency IOs.

The Company's overall RMBS portfolio decreased by 0.3% to $1.576 billion
as of September 30, 2018, as compared to $1.580 billion as of June 30,
2018. The Company's Agency RMBS portfolio turnover was 18% for the
quarter, which was modestly higher than the prior quarter. The Company's
total investment in non-Agency RMBS was $12.0 million as of both
September 30, 2018 and June 30, 2018.

The primary drivers of net income for the quarter were strong net
interest income on the Company's Agency RMBS investments and net
realized and unrealized gains from its interest rate hedges. A portion
of this income was offset by net realized and unrealized losses on the
Company's Agency RMBS investments that occurred as Agency RMBS prices
declined again during the third quarter. During the quarter the Company
continued to hedge interest rate risk, primarily through the use of
interest rate swaps, short positions in TBAs, U.S. Treasury securities,
and futures.

The Company's non-Agency RMBS performed well during the quarter, driven
by strong net interest income and net realized and unrealized gains.
Fundamentals underlying non-Agency RMBS continue to remain strong, led
by a stable housing market. To the extent that more attractive entry
points develop in non-Agency RMBS, the Company may increase its capital
allocation to this sector.

In the third quarter, Core Earnings and Adjusted Core Earnings were
modestly lower than in the second quarter due to lower adjusted net
interest margin, where higher asset yields quarter-over-quarter were
more than offset by increases in repo borrowing rates.

Reconciliation of Core Earnings to Net Income (Loss)

Core Earnings consists of net income (loss), excluding realized and
change in net unrealized gains and (losses) on securities and financial
derivatives, and, if applicable, items of income or loss that are of a
non-recurring nature. Core Earnings includes net realized and change in
net unrealized gains (losses) associated with payments and accruals of
periodic payments on interest rate swaps. Adjusted Core Earnings
represents Core Earnings excluding the effect of the Catch-up Premium
Amortization Adjustment on interest income. The Catch-up Premium
Amortization Adjustment is a quarterly adjustment to premium
amortization triggered by changes in actual and projected prepayments on
the Company's Agency RMBS (accompanied by a corresponding offsetting
adjustment to realized and unrealized gains and losses). The adjustment
is calculated as of the beginning of each quarter based on the Company's
then assumptions about cashflows and prepayments, and can vary
significantly from quarter to quarter.

Core Earnings and Adjusted Core Earnings are supplemental non-GAAP
financial measures. The Company believes that Core Earnings and Adjusted
Core Earnings provide information useful to investors because they are
metrics that it uses to assess its performance and to evaluate the
effective net yield provided by the portfolio. Moreover, one of the
Company's objectives is to generate income from the net interest margin
on the portfolio, and Core Earnings and Adjusted Core Earnings are used
to help measure the extent to which this objective is being achieved.
However, because Core Earnings and Adjusted Core Earnings are incomplete
measures of the Company's financial results and differ from net income
(loss) computed in accordance with GAAP, they should be considered as
supplementary to, and not as substitutes for, net income (loss) computed
in accordance with GAAP.

The following table reconciles, for the three-month periods ended
September 30, 2018 and June 30, 2018, the Company's Core Earnings and
Adjusted Core Earnings on a consolidated basis to the line on the
Company's Consolidated Statement of Operations entitled Net Income
(Loss), which the Company believes is the most directly comparable GAAP
measure on its Consolidated Statement of Operations to Core Earnings:

For the three-month period ended September 30, 2018, represents Net
realized gains (losses) on financial derivatives of $4.1 million
less Net realized gains (losses) on periodic settlements of interest
rate swaps of $1.3 million. For the three-month period ended June
30, 2018, represents Net realized gains (losses) on financial
derivatives of $(3.7) million less Net realized gains (losses) on
periodic settlements of interest rate swaps of $(1.3) million.

(2)

For the three-month period ended September 30, 2018, represents
Change in net unrealized gains (losses) on financial derivatives of
$4.6 million less Change in net unrealized gains (losses) on accrued
periodic settlements of interest rate swaps of $(0.9) million. For
the three-month period ended June 30, 2018, represents Change in net
unrealized gains (losses) on financial derivatives of $10.8 million
less Change in net unrealized gains (losses) on accrued periodic
settlements of interest rate swaps of $1.5 million.

About Ellington Residential Mortgage REIT

Ellington Residential Mortgage REIT is a mortgage real estate investment
trust that specializes in acquiring, investing in and managing
residential mortgage- and real estate-related assets, with a primary
focus on residential mortgage-backed securities, for which the principal
and interest payments are guaranteed by a U.S. government agency or a
U.S. government-sponsored enterprise. Ellington Residential Mortgage
REIT is externally managed and advised by Ellington Residential Mortgage
Management LLC, an affiliate of Ellington Management Group, L.L.C.

Conference Call

The Company will host a conference call at 11:00 a.m. Eastern Time on
Tuesday, November 6, 2018, to discuss its financial results for the
quarter ended September 30, 2018. To participate in the event by
telephone, please dial (877) 437-3698 at least 10 minutes prior to the
start time and reference the conference ID number 8816549. International
callers should dial (810) 740-4679 and reference the same conference ID
number. The conference call will also be webcast live over the Internet
and can be accessed via the "For Our Shareholders" section of the
Company's web site at www.earnreit.com.
To listen to the live webcast, please visit www.earnreit.com
at least 15 minutes prior to the start of the call to register,
download, and install necessary audio software. In connection with the
release of these financial results, the Company also posted an investor
presentation, that will accompany the conference call, on the Company's
website at www.earnreit.com
under "For Our Shareholders—Presentations."

A dial-in replay of the conference call will be available on Tuesday,
November 6, 2018, at approximately 2:00 p.m. Eastern Time through
Tuesday, November 20, 2018 at approximately 11:59 p.m. Eastern Time. To
access this replay, please dial (800) 585-8367 and enter the conference
ID number 8816549. International callers should dial (404) 537-3406 and
enter the same conference ID number. A replay of the conference call
will also be archived on the Company's web site at www.earnreit.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
numerous risks and uncertainties. Actual results may differ from the
Company's beliefs, expectations, estimates, and projections and,
consequently, you should not rely on these forward-looking statements as
predictions of future events. Forward-looking statements are not
historical in nature and can be identified by words such as "believe,"
"expect," "anticipate," "estimate," "project," "plan," "continue,"
"intend," "should," "would," "could," "goal," "objective," "will,"
"may," "seek," or similar expressions or their negative forms, or by
references to strategy, plans, or intentions. Examples of
forward-looking statements in this press release include, without
limitation, the Company's beliefs regarding the current economic and
investment environment, the Company's ability to implement its
investment and hedging strategies, the Company's future prospects and
the protection of the Company's net interest margin from prepayments,
volatility and its impact on the Company, the performance of the
Company's investment and hedging strategies, the Company's exposure to
prepayment risk in the Company's Agency portfolio, estimated effects on
the fair value of the Company's RMBS and interest rate derivative
holdings of a hypothetical change in interest rates, statements
regarding the Company's share repurchase program, and statements
regarding the drivers of the Company's returns. The Company's results
can fluctuate from month to month and from quarter to quarter depending
on a variety of factors, some of which are beyond the Company's control
and/or are difficult to predict, including, without limitation, changes
in interest rates and the market value of the Company's securities,
changes in mortgage default rates and prepayment rates, the Company's
ability to borrow to finance its assets, changes in government
regulations affecting the Company's business, the Company's ability to
maintain its exclusion from registration under the Investment Company
Act of 1940 and other changes in market conditions and economic trends.
Furthermore, forward-looking statements are subject to risks and
uncertainties, including, among other things, those described in Item 1A
of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2017 filed on March 14, 2018 which can be accessed through
the link to the Company's SEC filings under "For Our Shareholders" on
the Company's website (www.earnreit.com)
or at the SEC's website (www.sec.gov).
Other risks, uncertainties, and factors that could cause actual results
to differ materially from those projected or implied may be described
from time to time in reports we file with the SEC, including reports on
Forms 10-Q, 10-K and 8-K. We undertake no obligation to update or revise
any forward-looking statements, whether as a result of new information,
future events, or otherwise.